After a period of very limited tanker fleet growth across all but the MR sector, the tanker fleet has surged over the past twelve months by another 203 units amounting to 21.9 million dwt, according to Gibson Shipbrokers.
The strength of the tanker market during the low oil price regime meant that owners have had little for scrapping as bunker prices headed south improving their margins still further.
Eco-ships no longer held any significant advantage as legislation on environmental issues continued to keep its distance resulting in demolition numbers falling to a mere 34 tankers, representing 2.5 million dwt, over the past year.
Of the 366 tanker orders placed last year, 218 were contracted in the second half of the year, although many were placed to circumvent the higher costs associated with the new Tier III regulations which came into force on January 1 in the US.
Newbuilding prices themselves had been slowly falling since June 2014 but had a small resurgence over the fourth quarter of 2015.
However, the appetite for new orders across all the tanker sectors has evaporated this year despite renewed falls in pricing and the mounting pressure on shipbuilders to fill their forward orderbook.
Furthermore, finance appears to have “ended its love affair with the shipping industry, mostly driven by the disastrous state of affairs in the dry cargo market, but also the high tanker orderbook and the spate of deliveries scheduled for 2016/17,” Gibson said.
In the first half of this year 14 million dwt has already been delivered compared to the 17 million dwt in the whole of 2015.
Despite the strong earnings across most tanker sectors over the past two years, second-hand values have also come under downwards pressure since the turn of this year as freight rates began to decline.
The second half of the year is expected to remain challenging particularly with such a heavy delivery profile scheduled, according to Gibson.
“Earnings across most sectors started the year quite strongly although crude began to slump recently, while the products sector has experienced a tough six months. Of course the health of the tanker market remains very much in the hands of the producers and the decisions that they make regarding future production,” Gibson said.
“However, we still need to keep a watchful eye on the orderbook and hope that new orders remain in check.”